GOCC pay hikes subject to Prez’ OK  -- CA

July 30, 2020

The increase in salaries for rank-and-file personnel in government-owned and controlled corporations is subject to the approval of the President, the Court of Appeals said in a ruling.

In a 24-page decision dated July 9, the CA's First Division through Associate Justice Ramon Cruz, ruled in favor of the APO Production Unit and voided the ruling dated Oct. 1, 2019 of the National Conciliation Mediation Board ordering the implementation of its renegotiated collective bargaining agreement with the Asian Productivity Employees Association for the years 2014 and 2015.

"In sum, while we commiserate with the plight of petitioner APO's workers in seeking an increase in their salaries. We cannot give an imprimatur to an act that is explicitly prohibited by law," the CA said.

APO Production Unit Inc is a GOCC put up in 1974 and subsequently placed under the supervision of the Presidential Communications Operations Office in 2010.

APEA is the bargaining agent of APO's rank and file employees. In 2012, APO and APEA entered into a five-year collective bargaining agreement effective 2011 to 2016.

In 2013, APEA requested the renegotiation of the remaining two years of the CBA where it raised an issue concerning increase in employees' salaries.

APO then sent a request for an opinion from the Governance Commission for GOCCs  requesting guidance on how to proceed with its negotiations with the APEA.

In a letter dated Sept. 2, 2013, GCG replied to APO stating that compensation matters cannot be voluntarily agreed upon by the board of APO with APEA under a CBA since such "matters are subject to policies, guidelines, and parameters prescribed and approved by the President."

In a second letter dated July 6, 2015, the GCG stated that "if APO negotiates and enters into a CBA with the unions, the resulting CBA, without the approval of the President of the Philippines, will be illegal".

On Oct. 1, 2019, the NCMB's voluntary arbitrator issued the decision in favor of the implementation of the negotiated terms of the 2014-2015 CBA.

The arbitrator said Executive Order  7, s. 2010 on the moratorium on salary increases cannot contravene the mandate of Article 244 of the Labor Code, as on the right of unchartered GOCCs to bargain collectively.

It also said nothing in the law gave authority to the GCG to suspend, modify, alter, repeal, or amend the operation of labor laws prompting APO to bring the case to the CA.

Ruling otherwise, the CA said the GOCC Governance Act of 2011, creating the GCG was tasked to develop and recommend to the President a competitive compensation and remuneration system for GOCCs.

"The said act covered all GOCCs, without differentiating between chartered and non-chartered," the CA said.

Associate Justices Remedios A. Salazar-Fernando and Perpetua Susana T. Atal-Pano concurred.